SOUTH ASIA

NOL has an operating presence in more than 25 separate countries within this geographically vast and hugely diverse region. South Asia contains many of the fastest-growing markets in our Group’s portfolio and in 2008, despite generally deteriorating global economic conditions, many achieved record volumes and profit contributions.

The Middle East represents the largest sub-segment of South Asia commercial activity and contributed around 15% of NOL revenue in 2008. A five-year plan to create a sustainable business structure while keeping costs down was introduced during the year.

APL’s Middle East footprint was expanded with the opening of offices in Egypt, Bahrain and Saudi Arabia and new services were launched and expanded. The Laem Chabang West Asia Express service linked Thailand and South East Asia with the Middle East via direct calls at Jebel Ali and Dammam. Elsewhere, feeder services were introduced between Jebel Ali and the Iraqi port of Umm Qasr catering for both government and commercial cargoes.

NOL established a unique service proposition in Oman. While other carriers grappled with serious port congestion at Muscat, APL shifted its base to the port of Sohar, around 200km away. Sohar’s modern infrastructure reduces port time for ships, enabling customers to secure their cargo sooner and compensating for the increased distance from Muscat.

The service changes helped to control costs, with direct connections reducing handling and relay expenses. By 2011, APL’s position in Oman will be strengthened as a result of a joint venture to build and operate a container terminal at Port of Salalah in Oman.

In India, a key market for the Group, there was significant growth across all product segments. Since its launch eight months ahead of schedule in June 2007, IndiaLinx™ has carved a niche as one of India’s leading private sector rail operators, offering a single point of coordination for inland and ocean transportation. The service achieved utilisation levels of up to 95% on a sustained basis, overall rail capacity was increased by 150% year-on-year and new service points beyond the New Delhi-Mumbai corridor were introduced. Further investment in land-side rail depots is planned for 2009.

APL’s leadership in India and the Middle East was recognised in 2008. It was named Best Shipping Line by the Supply Chain and Logistics Conclave of Mumbai, Best Shipping Agent by the Sri Lankan Institute of Shipbrokers and Dry Cargo Company of the Year at the Lloyd’s List Middle East Awards.

The introduction of new services saw Australian volumes increase by 21%. In order to capitalise on trade growth between North Asia and Australia, additional Container Shipping service loops were introduced. This included the northbound China Australia North and other services offering more extensive coverage of Chinese ports as well as direct access from the Japan, Korea and Taiwan markets into and out of Australia.

2008 also saw a resurgence in economic activity across Indonesia, Malaysia, Thailand and Singapore, reflected in positive growth in volumes in all these markets. APL’s investment in additional reefer capacity and land-based cold chains led to a significant boost in shipments of refrigerated agricultural produce from the Philippines.

While Vietnam’s exponential growth of recent years slowed in 2008, its importance to the global supply chain continued to grow. APL continued to develop its service offerings, launching a new container shipping service between Vietnam, Taiwan and Singapore called the Southern Vietnam Express service. Upgrading work was completed at the Vietnam International Container Terminal in Ho Chi Minh City, in which NOL has a 47% stake.